Financial instruments can be categorized by form depending, for example, on whether they are cash instruments or derivative instruments. Cash instruments are financial instruments whose value is determined directly by markets. Derivative instruments are financial instruments, which derive their value from some other instrument or variable. Financial instruments can also be divided into exchange-traded derivatives and over-the-counter (OTC) derivatives.
Sales and trading of financial instruments are sometimes a very profitable area of investment banking, responsible for a large part of revenue for many financial institutions such as banks or brokers.
In the process of market making, ‘traders’ (trading desk) will buy and sell financial products with the goal of making an incremental amount of money on each trade.
A sales force, e.g., a Bank's or broker's sales force, may call on ‘clients’, such as institutional and high-net-worth investors or corporations who need to hedge their risks, to suggest possible trades and take orders. The term ‘Structuring’ may relate to the creation of complex financial products, which embed derivatives, and as such typically may offer much greater margins and returns than underlying cash securities. Bank/broker Sales and structuring desks (commonly referred to as ‘Sales’) may then communicate their clients' orders to the appropriate ‘trading desks’ who can price and execute trades, or structure new products that fit a specific need.
Customer Relationship Management (CRM) is a systematic approach towards using information and ongoing dialogue to build long lasting mutually beneficial customer relationship. CRM may include a collaborative system of business practices implemented across an enterprise to organize the acquisition, aggregation, and/or analysis of customer profiles.
CRM services may allow sharing customer information across the company in order to create a customer-centric organization.